IP Law Daily, COPYRIGHT—E.D. Mo.: Court taps the breaks on online vehicle parts seller’s dispute with competitor, (Jul 19, 2017)

By Jody Coultas, J.D.

Despite not having completed registrations for every photograph at issue in a copyright infringement suit, online vehicle accessory part vendor etrailer Corporation stated claims against competitor Onyx Enterprises, Int’l Corp. for allegedly copying and displaying etrailer’s photographs on its website, the federal district court in St. Louis has held. However, the court dismissed etrailer’s Lanham Act and Missouri common law claims for false designation of origin because there was no possibility of confusion as to the origin of the goods depicted in the photographs at issue (etrailer Corp. v. Onyx Enterprises, Int’l Corp., July 17, 2017, Fleissig, A.).

Etrailer sells trailer hitches, trailer parts, and towing accessories online using its own photographs and videos to advertise and market the third-party products it sells. The photos and videos have either copyright registrations approved by the Copyright Office, or are the subject of pending, completed copyright registration applications filed with the Copyright Office.

Onyx, which does business on the Internet as CARiD.com, sell many of the same third-party products that etrailer sells. According to a complaint filed by etrailer, Onyx willfully infringed on Etrailer’s copyrights by illegally copying and displaying thousands of etrailer’s Photos on CARiD.com to sell the products depicted in the photos. Also, etrailer alleged that Onyx altered some of the photos by removing etrailer’s name or marks that originally appeared in the photos on or near the products depicted in violation of the Lanham Act and Missouri statutory and common law.

At the outset, the court noted that Onyx did not waive its opportunity to argue for dismissal of etrailer’s copyright infringement claim for failure to state a claim. Etrailer argued that Onyx waived its opportunity to move to dismiss the copyright infringement claim for failure to state a claim by initially attacking that count on subject matter jurisdiction grounds. While a reply memorandum in support of a motion to dismiss should generally not raise a new argument for dismissal, courts may consider such an argument where, as here, the nonmoving party has been given leave to file a surreply to address the new argument, and did so.

Copyright infringement. Onxy was denied dismissal of etrailer’s copyright infringement claims by the court. The Copyright Act requires that a copyright holder wait to file an action for infringement until preregistration or registration of the copyright claim has been made. There is a split among the federal circuit courts on whether applied-for registrations satisfy the condition for an infringement claim under the Copyright Act. Allowing a suit after filing a complete copyright application with the Copyright Office avoids unnecessary delays in infringement litigation based on the Copyright Office’s processing an application. Also, delaying such a suit may cause the case to be time-barred under the Copyright Act’s three-year statute of limitations. Also, allowing such suits meets the Copyright Act’s mandate that an application’s effective registration date is the day a completed application is received, not the day it is approved. Although etrailer has not substantiated its claim that "thousands" of photos were infringed, such complete factual development is unnecessary to survive a motion to dismiss. Etrailer will have to specify which photos were infringed and their registration status at a later date, however.

False designation of origin. Etrailer failed to state a claim for false designation of origin because the products depicted in the photos were not made by etrailer, according to the court. Etrailer argued that Onyx unlawfully doctored some of the photos to remove etrailer’s name from the products depicted in order to "cause confusion, mistake, and deception as to the affiliation, connection, or association of the products with etrailer, or as to the sponsorship or approval of said products by etrailer." However, etrailer was not the "origin" of the underlying products in the photos. Onyx did not falsely designate the origin of the goods it sells by removing etrailer’s marks because etrailer did not allege that Onyx removed etrailer’s logos from the actual products Onyx sells. Onyx’s alleged doctoring of the photos did not mislead consumers as to the underlying products’ origin. There was no possibility of confusion by consumers as to the origin of the goods because the vehicle accessories—whether sold by etrailer or Onyx—were manufactured by the same source.

The case is No. 4:17-CV-01284-AGF.

Attorneys: Don V. Kelly (Evans & Dixon LLC) for Etrailer Corp. Jeffrey H. Kass (Lewis and Brisbois, LLP) for Onyx Enterprises, Int'l Corp. d/b/a Carid.com.

Companies: Etrailer Corp.; Onyx Enterprises, Int'l Corp. d/b/a Carid.com

Cases: Copyright Trademark MissouriNews